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For example, at-home hair coloring company Madison Reed produces hair coloring kits, which rely on specific information from the customer to select the correct shade. This kind of experience, which promises customers they’ll “find the perfect shade,” can’t be replicated on Amazon because the platform doesn’t support this type of personalization.
But Elbert also says that this decision has potentially dampened their sales, since Amazon accounts for 50% of all e-commerce sales and 80% to 85% of purchases are still happening in brick-and-mortar stores. “Launching a brand outside both of those channels enforces constraints—you have to prove that you’re good at storytelling, you have to prove you can build an audience, and that you can connect with consumers,” says Elbert.
Reed says that any company considering the sale of products on Amazon should carefully evaluate the potential impact on financials, brand and customer relationships. One specific issue is the inability to continue selling to customers who’ve purchased from a brand in the past—because Amazon owns the customer relationship, not the brand.
podcast. When Kahan joined Birkenstock in 2013, the company’s wholesale business with Amazon accounted for a significant portion of Birkenstock revenue . But Kahan soon found the Amazon marketplace flooded with third-party sellers, many of whom were causing issues for the brand.